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AT&T CEO Randall Stephenson is ready to throw down, now that he's got his boys on his back.  (Source: zdnet.com)
Eight large tech companies and 10 venture capital firms write support letters to FCC

Until now, AT&T's planned takeover of T-Mobile for $39 billion has made more headlines for its opponents than its supporters. Sprint came out in full force against the measure, saying it would create a de facto duopoly in mobile landscape between Verizon and AT&T (who would boast most of the country's mobile customers). The deal went before Congress, where staffers pointed to the concerns over loss of competition and jobs if the merger were to be completed.

Now, a number of high-profile technology companies and venture capital firms have come out in support of the merger, The New York Times reports. Eight technology giants — including Facebook, Microsoft, Qualcomm, Yahoo, Oracle, and Research in Motion — and 10 venture capital firms filed letters of support with the Federal Communications Commission on Monday, saying the merger would provide better access to mobile data for more people across the country.

According to the report, Microsoft approached a "select few" technology companies on behalf of the merger, asking for their support in the form of a letter. Microsoft’s VP for United States Government Affairs Fred Humphries told NYT that the company received "quick and positive replies."

A few excerpts from the Microsoft-penned letter:
Consumer demand for wireless broadband is dramatically increasing and our wireless networks are struggling to keep pace with the demand. Given the network capacity challenges, policymakers must givemeaningful consideration to AT&T’s acquisition of T-Mobile as a means of addressing their nearterm wireless broadband capacity needs.
...
AT&T’s acquisition of T-Mobile represents a near term means of addressing the rising consumer demand. For example, the merged company will be able to leverage a larger network of cell sites allowing greater reuse of spectrum and increasing the wireless broadband capacity of the network.
"The lack of adequate spectrum is killing the quality of users’ experience," Promod Haque, a managing partner of Norwest Venture Partners, told NYT. "Customers say, ‘I can’t even get a phone call and can’t get adequate reception. So you want me to use this new service?’" The merger would be easier and more cost-effective than the alternatives for improving spectrum, he said.

While the letter was written to the FCC, that is just one regulatory body that the merger must gain approval from in order for the deal to come to fruition; it must also be approved by the Federal Trade Commission and the U.S. Department of Justice.


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Here is my answer to the posted comments
By amanojaku on 6/9/2011 9:26:28 AM , Rating: 5
Consumer demand for wireless broadband is dramatically increasing and our wireless networks are struggling to keep pace with the demand because providers refuse to pay for new infrastructure. A T-Mobile buyout is cheaper than an infrastructure upgrade.

Given the network capacity challenges, policymakers must tell AT&T to buy its own towers as a means of addressing its near-term wireless broadband capacity needs.

AT&T’s acquisition of T-Mobile represents a near term means of addressing the rising consumer demand , and a long-term concern of increased service costs due to lack of competition, and, uh, unforeseen cost overruns.

For example, the merged company will be unable to foresee LTE infrastructure upgrade costs, and the need to place more 4G towers in rural areas.




RE: Here is my answer to the posted comments
By sprockkets on 6/9/2011 9:40:32 AM , Rating: 2
Indeed. And what does Att plan to do with T-Mobile's 1700mhz towers? Shut them down.

Lack of available spectrum my ass.


RE: Here is my answer to the posted comments
By Myrandex on 6/9/2011 11:13:01 AM , Rating: 2
They have already stated that they are planning on using the spectrum for LTE. That doesn't mean shut down, that means convert to a new type of communication.

Jason


RE: Here is my answer to the posted comments
By omnicronx on 6/9/2011 12:37:18 PM , Rating: 2
Yay! Yet another band for LTE! (which would make 6)

Forget Tri or Quad band for international phones, bring on the hexa-band!


By seamonkey79 on 6/11/2011 11:19:48 AM , Rating: 2
mmm... hexa-band...


RE: Here is my answer to the posted comments
By amanojaku on 6/9/2011 11:26:46 AM , Rating: 3
I don't understand why people think the merger is a good idea. Do people really think T-Mobile has a vast network of untapped towers, ready for 90m+ users, or even 9 million? T-Mobile's network is not a panacea for AT&T's mismanagement;it will become oversubscribed just like everything else.

What AT&T needs to do is fire its executives, and/or restrict bonus pay. How can you run a for-profit and not have money for growth?!? Where does the profit go?


By therealnickdanger on 6/9/2011 2:18:24 PM , Rating: 2
Just because you have profit doesn't mean you have enough profit. If I have a lemonade stand that cost $100 to build and $5/day to operate and I make $10/day revenue. How long before I can afford to expand and build another stand a block away? What if demand slows? Will I have enough to keep both booths running? For how long?

It's not a simple binary operation where any profit automatically means growth and expansion. Every company has a set goal for margin (the percent of revenue that is profit). When that goal is reached, companies typically grow.


RE: Here is my answer to the posted comments
By nolisi on 6/9/2011 11:47:29 AM , Rating: 3
quote:
If AT&T could currently afford to expand its network with new infrastructure and be profitable, it would .


AT&T Wireless had 30+ billion dollars in revenue in 2010. I think they can afford to build a few more fu**ing towers.

Why are other carriers able to expand networks without purchases or price increases and AT&T isn't? The answer is mismanagment, greed, or both. In particular, if mismanagement is killing AT&T, I don't want them to take T-Mobile with it. Even if their mismanagement isn't killing them, as a customer I don't want AT&T to kill the great service I've always gotten from TMO.

You make AT&T sound like it's in a vulnerable position when they're spending billions to buy T-Mobile, why not spend the same money to build more infrastructure?

Free market economics 101- competition drives innovation and growth. Buying the competition reduces competition and thusly reduces innovation and growth.


By therealnickdanger on 6/9/2011 2:09:51 PM , Rating: 1
quote:
AT&T Wireless had 30+ billion dollars in revenue in 2010. I think they can afford to build a few more fu**ing towers.

Revenue != profit. If you make $30 billion, but it costs $29 billion to maintain and run your business, then you don't have much extra to play with. I'm not saying that's the case here, just making a point. Besides, if you owned AT&T and you could either buy pre-installed towers and infrastructure for less than building new, wouldn't you do it? I would.
quote:
Buying the competition reduces competition and thusly reduces innovation and growth.

That's not entirely accurate. How many times has Microsoft, Google, or Apple acquired upstarts or competing corporations and used those purchases to innovate and grow their products? The effects are not always immediate, but are typically beneficial to everyone involved.
quote:
as a customer I don't want AT&T to kill the great service I've always gotten from TMO

I get it, you're scared AT&T is going to ruin your years of happy service with T-Mobile. There's no sense in being negative until you actually have a problem, y'know? If suddenly your bill skyrockets or your connectivity suffers, you can just do what everyone else does with every other carrier - switch carriers.


By omnicronx on 6/9/2011 3:15:21 PM , Rating: 2
quote:
I get it, you're scared AT&T is going to ruin your years of happy service with T-Mobile. There's no sense in being negative until you actually have a problem, y'know? If suddenly your bill skyrockets or your connectivity suffers, you can just do what everyone else does with every other carrier - switch carriers.


#1 How do you switch Telcos when there are only two whom have already devided territory to create virtual monopolies in their respective markets (and don't kid yourselves, if this goes through in 10 years there will be two)

#2 How naive are you? This has happened before! Why on earth would you wait for history to repeat itself? Not even 30 years ago that AT&T was broken up for the very reasons you are defending against.

#3 Many hate AT&T's network as it currently stands, why on earth would presume it is suddenly going to get better for T-Mobile users post merger? Clearly T-mobile users will get the raw end of the deal here, their costs will most likely rise in the future, devices most likely won't be interchangeable between each network and many would argue that the service level will be a step downward. (just a quick look at customer approval rates show this)


RE: Here is my answer to the posted comments
By nolisi on 6/9/2011 4:59:41 PM , Rating: 2
quote:
I'm not saying that's the case here, just making a point.


The problem is that you aren't making a point. You're making a hypothetical. And you're forgetting one important point of mine that's directly related to revenue: if AT&T has enough money to buy the whole of T-Mobile, then they can build towers. Do you have a real point to counter this argument, or another hypothetical?

quote:
How many times has Microsoft, Google, or Apple acquired upstarts or competing corporations and used those purchases to innovate and grow their products


To my knoweldge, Google hasn't purchased a directly competing search engine, Microsoft hasn't purchased a competing OS/Infrastructure/Productivity entity, and Apple hasn't purchased a competing closed architecture, cell phone company, mp3 player manufacturer. Every case you cite equates to expansion into new markets, not market consolidation. And there are more cases of market consolidation hurting competition and stifling innovation, rather than helping it. Market consolidtation is a bad idea, but if a more powerful company props up a smaller company to expand a market, well, that's usually a good thing.

quote:
you're scared AT&T is going to ruin your years of happy service with T-Mobile. There's no sense in being negative until you actually have a problem, y'know?


You're making the wrong assumption I (and others) never had a problem with AT&T. I'm being negative based on past experience and I haven't seen any idication that they've improved. I shouldn't have to switch carriers because AT&T doesn't want to build infrastructure.

Or should I just pretend that my past issues with AT&T never happened because of the falsehood of market consolidation being a good idea?


RE: Here is my answer to the posted comments
By Reclaimer77 on 6/9/2011 5:49:20 PM , Rating: 2
quote:
I shouldn't have to switch carriers because AT&T doesn't want to build infrastructure.


Absurd rationale that has poisoned your entire argument. AT&T isn't obligated to spend money the way YOU think they should.

Are you a major shareholder? Are you on the board of directors? No? Well then shut the F up.


RE: Here is my answer to the posted comments
By nolisi on 6/9/2011 6:35:27 PM , Rating: 2
quote:
Well then shut the F up.


Well when you put it that way- make me.

Nothing is poisoned by that opinion. Facts are facts- market consolidation almost never benefits innovation and market growth, and ultimately the consumer.

And fortunately for me as a consumer and as a T-Mobile customer, regulatory agencies may make the shareholder/BOD argument moot. Hopefully they will see fit to withhold approval for the purchase and support the all important free market princimples of market growth, diversity, and innovation which ultimately benefit consumers (and even suppliers) more than consolidation.


RE: Here is my answer to the posted comments
By Reclaimer77 on 6/9/2011 7:27:43 PM , Rating: 2
quote:
Nothing is poisoned by that opinion. Facts are facts- market consolidation almost never benefits innovation and market growth, and ultimately the consumer.


Doesn't matter. You're either for a free economy or you're for tyranny. Companies should have the right to "consolidate markets", regardless of how you think it might impact you.

quote:
Hopefully they will see fit to withhold approval for the purchase


Hoping for government intervention, well now I know you're a moron.

Try to see that the world doesn't revolve around you and your precious cell phone service fears.


RE: Here is my answer to the posted comments
By foolsgambit11 on 6/10/2011 2:39:36 AM , Rating: 2
quote:
You're either for a free economy or you're for tyranny.
I don't think the issue is that black and white (as an aside, your argument is similar to Hobbes' argument in 'Leviathan' that we either live in a state of anarchy or a state of tyranny, and there's nothing in between - so at least you're in fairly good intellectual company). But if you insist that any government intervention in totally free markets is tantamount to tyranny, then I must admit I'm for tyranny. Regulations on what it is legal to sell, truth in advertising, and, yes, anti-trust regulations, are all important to ensure the preservation of the true goals of a free market (after all, a free market is really a means to an end, not an end in and of itself), and to preserve the market in its freest possible form.

A totally free market wouldn't last very long - it would rapidly advance to total monopoly, which would ultimately destroy the freedom of the market. Essentially, it would become the equivalent of a socialist state, but with a corporation owning all the means of production, rather than the government (a corporatocracy). Regulation is intended to preserve the precarious balance of freedom in the free market system (though it is far from perfect, as all human endeavors are). To repurpose an old Winston Churchill quote, a regulated free market is the worst economic system, except for all the others.


RE: Here is my answer to the posted comments
By nolisi on 6/10/2011 12:48:32 PM , Rating: 2
quote:
Essentially, it would become the equivalent of a socialist state, but with a corporation owning all the means of production, rather than the government (a corporatocracy).


Thank you for that injection of intelligence.

It's funny, all these "let's have a completely unmanaged market" mongers don't realize that complete consolidation means corporate socialism. They talk about freedom in the markets not realizing that all large corporations resemble a socialist oligarchy, especially when it comes to critical infrastructure like communications or utilities. And if they have unchecked market power, well, then consumers get tyranny anway.


By Reclaimer77 on 6/11/2011 1:14:56 PM , Rating: 2
quote:
It's funny, all these "let's have a completely unmanaged market" mongers


I never said that and I wasn't advocating for that.

Our markets are already heavily regulated, and frankly, have to put up with too much government intervention as it is.

It should NOT be a freaking act of congress when two companies willingly agree to a completely legal merger. End of discussion.


By PrezWeezy on 6/9/2011 9:02:11 PM , Rating: 2
quote:
Free market economics 101- competition drives innovation and growth.


Are you arguing that the Government should step in and ensure that this free-market economy maintains the proper level of competition? Sounds a bit oxy-moronic...


Do they really understand....
By tng on 6/9/2011 9:13:41 AM , Rating: 3
Do they really understand why allot of the general public are not in favor of this?

quote:
our wireless networks are struggling to keep pace with the demand.


Everybody is in favor of a wider reaching, more capable network for mobile data, but do we really have to put AT&T in charge of it?

Places like MS, Qualcom and Facebook are in this for self interest to generate more users and sell more products, not because it will might benefit the general public.




By Myrandex on 6/9/2011 11:14:02 AM , Rating: 2
I'm all in for this!


Reasoning
By RedemptionAD on 6/9/2011 10:00:03 AM , Rating: 2
I beleive that the transaction is mostly a stock trade and the reason for the aquisition was due to T-Mobile's large amount of Cash on hand. AT&T might actually use the cash on hand for a *gasp* infrastructure update. T-Mobile doesn't have the ability to both expand its coverage to compete with an AT&T/Verizon and upgrade to LTE. The cash on hand that T-Mobile has might allow AT&T to upgrade it's broader coverage to LTE inorder to compete with Verizon, but that is only if the use the cash on hand that they would get from the merger....




By FS on 6/9/2011 10:45:38 AM , Rating: 2
http://www.dslreports.com/shownews/ATT-Forced-to-R...

and I don't mean, the getting caught and forced to refund part




I dont Like it
By IlllI on 6/9/2011 2:01:24 PM , Rating: 2
there is something about 2 companies owning almost 80% of the cell phone market that rubs me the wrong way. hmm. not too surprising m$ would support this venture.




Surprise?
By The Raven on 6/10/2011 1:59:00 AM , Rating: 2
quote:
Microsoft, Facebook Among Supporters for AT&T/T-Mobile Merger

Why am I not surprised that 2 virtual monopolies powered by sheep are on board with the idea of another monopoly powered by sheep being created?

On the other hand, here we have yet another case of overregulation leading to more regulation. If the gov't would cut the damn imbicilicle cord already, the citizens would easily be able to solve their own problems. Cellular providers aren't going to kill anyone. Let the consumers learn their lessons on their own already.

And also let's not forget that cell phones are not even a necessity and yes, I know it is the year 2011 ;-P




By jconan on 6/10/2011 2:42:32 AM , Rating: 2
Probably this guy has some investments in AT&T that he isn't divulging. Why else would he have other companies write to the FCC in support of the AT&T merger. This has kickbacks and bonuses written all over it...




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